Elasticities and flexibilities
When measuring the demand, it is very useful to know the
relationship between the change in quantity demanded after a
change in price and vice versa.
But: Doing so using only the slope does not allow for
comparisons across g
_ Supply schedule
_ Supply curve
- Illustrates all quantities supplied at every alternative price.
- Describes the marginal cost of the last produced unit.
- Upward sloping (Law of Supply). For a normal good, as price
increases, the qu
Role of prices
The role of price is integral in agricultural markets.
_ Price is a signal for production and consumption.
_ Government can play a large role in affecting prices in
_ Knowing and predicting future prices is very import
Spatial Concepts in Agricultural Markets
Transportation is a crucial factor in agricultural marketing.
_ Movement of agricultural products across geographical
distances adds value to the product.
_ A decrease in transportation costs will lead to more tran
Food Marketing Channel
You go to Stacey's steakhouse, you order a nice, local 24
ounce steak (medium-rare, of course), and 15 minutes later
you're enjoying the steak's delicious taste and smell. You
then pay $30 for your dinner, and you're on your way.
What is marketing?
_ Change of ownership of agricultural and food products.
_ Link between agricultural production and food consumption.
_ Three aspects of market transactions:
- Spatial - transactions occur across space
- Temporal -transactions occur acr
_ Demand schedule
_ Demand curve
- Illustrates all quantities desired at every alternative price.
- Describes the marginal value of the last consumed unit.
- Downward sloping (Law of Demand)
For a normal good, as price increases, the q
Understanding the food marketing channel
Agricultural production is unique! One of the ways that it is
unique is that many agricultural commodities are produced
in equal proportions from some raw input:
! Hamburger meat
Equilibrium Displacement Models
We analyze economic scenarios using supply and demand
diagrams. However, we often esoterically say that although we
can show the market reaction on a graph, we need additional
information to solve the math.
Well, the excuse
What do S and D models tell us?
Here are some examples of what supply and demand curves
can be used to determine and analyze:
_ Price and quantity sold increase / decrease.
_ Price increases but quantity sold decreases.
_ Price decreases but quantity sold